Healthcare Technology Featured Article

August 17, 2015

Healthcare Startups Struggling to Stay Healthy

While there are plenty of people who believe technology is going to help the business of healthcare now and in the future, a new report from Accenture points out that being a startup in the healthcare industry is still tough going—despite the fact that funding for these kinds of businesses are growing all the time. Accenture says that these days, one out of every two healthcare startups is going to fail within the first two years of launch.

Perhaps the one piece of good news is that bigger companies could come along and mine these “zombie” startups for talented personnel as well as the innovative technologies those firms might have been using or even creating.

“Rather than discard the investment that has been made in getting sputtering startups off the ground, it often makes sense for healthcare stakeholders to acquire them, salvage their best people and technologies and awaken them from a zombie-like existence,” Kaveh Safavi, managing director for Accenture's global healthcare business said in a statement announcing the report. Safavi added that many digital startups that are dying or in danger of failure have come up with solutions that can help both traditional and non-traditional healthcare companies.

The report found that more than 51 percent of healthcare startups enter into a danger zone of failing within 20 months of a firm’s launch. The report also showed that bigger firms that snatch up these failing companies can benefit by grabbing an infusion of top talent as well as the ability to adopt greater innovation. That innovation can lead to these bigger firms coming up with brand new kinds of technology and it can also lead to bolstering a tech that already exists but has room for improvement. The report says that all in all, this shows there is a broad financial influx in the healthcare industry, even if it’s still a hostile place for brand new firms.